Mexico's Pena Nieto to push for quick reforms

MEXICO CITY (Reuters) - Mexican President-elect Enrique Pena Nieto pledged on Monday to focus on energy, labour and tax reforms and said he hopes to strike deals with opponents to help shepherd changes through Congress before he takes office in December.

Pena Nieto won Sunday’s election with about 38 percent of the vote, about 6 percentage points ahead of his nearest rival, returning the Institutional Revolutionary Party (PRI) to power after 12 years in opposition.

But the victory margin was smaller than expected and results suggested the PRI and its Green allies would struggle to win a majority, officials at the electoral authorities told Reuters.

That would leave Pena Nieto reliant on other parties to back his plans to reinvigorate Latin America’s No. 2 economy.

Speaking to reporters in Mexico City, the 45 year old said he was ready to consult with outgoing President Felipe Calderon and bring in experts to make progress on the reforms and help ease them through Congress, which reconvenes in September.

His main reform proposals include allowing more private investment in Mexico’s state-run oil industry, overhauling the tax system to improve government revenues and liberalizing the country’s labour laws to encourage job creation.

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“We will now be working on all these initiatives with public policy experts,” Pena Nieto told a news conference.

Calderon’s conservative National Action Party (PAN) had tried to get similar reforms through Congress over the past six years but the efforts were thwarted by opposition from the PRI, which has both populist and pro-business leanings.

Victor Garcia, a 51-year-old graphic designer in Mexico City, said the PRI’s failure to win a majority was a blow for the presidency and would stymie economic reform.

“All the parties just work to their own advantage,” he said. “And the president doesn’t give orders to anyone anymore.”

Pena Nieto has promised to lift economic growth to about 6 percent a year, create jobs and draw the heat out of a war with drug gangs that bogged down Calderon’s administration. The conflict has killed more than 55,000 people since late 2006.

Long regarded as corrupt and authoritarian, the PRI has bounced back under the youthful Pena Nieto, who has vowed to break with the party’s checkered past.

Mexico's President-elect Enrique Pena Nieto delivers a speech to the media at a hotel in Mexico City July 2, 2012. REUTERS/Henry Romero

He has sought to bring in new blood to the party, and Pena Nieto said his campaign chief, Luis Videgaray, 43, would form part of his government team. Videgaray is well regarded by investors and seen as a possible choice for finance minister.

But the party is still deeply resented by many Mexicans.

“Yes, the PRI has experience. They know how to steal. They know how to make pacts with drug cartels. And they know how to kill,” said Heliodoro Maciel, an electrician and trade unionist.

Final opinion polls before the election had shown Pena Nieto winning by 10 to 15 percentage points, but with 97 percent of returns in, the gap to his leftist rival, Andres Manuel Lopez Obrador, was 6.4 points, or roughly 3 million votes.

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PAN candidate Josefina Vazquez Mota came in a distant third as the PAN suffered a crushing defeat, hurt by Calderon’s failure to ramp up growth and curb the drug war violence.

The PAN raised high hopes when it was elected in 2000, but the economy underperformed its peers in Latin America for most of the 12-year rule by the party, which never had a majority in Congress and was unable to push through reforms.

“Nothing has improved since the PAN got in,” said Mexico City plumber Raimundo Salazar, 44. “The PRI understands how things work here. And it knows how to manage the drug gangs.”

FINANCES UNDER STRAIN

Lopez Obrador said on Sunday night it was too early to concede defeat, but Calderon and U.S. President Barack Obama have already congratulated Pena Nieto on his triumph.

The U.S. State Department said it expected close cooperation against organized crime to continue under Pena Nieto.

Pena Nieto will take over at a time when Mexico’s finances are in good order and the economy is improving, although it still cannot generate enough jobs for the growing population.

The election result helped bolster Mexico’s main share index early on Monday before weak global manufacturing data hit stocks and the peso currency.

Lopez Obrador could still choose to challenge the election, as he did six years ago when he narrowly lost to Calderon and launched months of protests, alleging fraud.

He has said in recent weeks this election campaign was also plagued with irregularities, raising concerns he might again call his supporters onto the streets. On Sunday night, he said only that he would wait until all the results were in.